2014 Global health care outlook

Press release

New York, 5 February 2014 – Rising demand of health care services coupled with technological advances will create new business opportunities for the health care industry. However, continued pressures on cost, lack of access, and market conditions will present serious industry challenges in 2014. This is according to Deloitte Touche Tohmatsu Limited’s (DTTL) new report, Global health care outlook: Shared challenges, shared opportunities. Additionally, the sector will need to engage public and private organizations on the health care value chain to deliver innovative solutions to address local needs if they want to address emerging market growth and the world’s aging population in the coming years.

The report examines the current state of the global health care sector, provides a snapshot of activity in a number of geographic markets, and suggests considerations for stakeholders as they address funding, cost, and other issues while seeking to grow revenue and market share in 2014 and beyond.

“Shared health care challenges may lead to shared solutions if individual countries endeavor to learn from other nations’ successful practices and adapt them to local needs,” said Russ Rudish, DTTL global health care sector leader. “I t is imperative that health care organizations gain a clear understanding of transformational changes taking place in the global health care sector as the push to innovate becomes more apparent.”

Among drivers for growth in the global health care sector are spending increases in emerging markets, expected population growth, increasing consumer wealth, and government programs to expand access to health care. Yet stakeholders also face four major issues in 2014: the impacts of an aging population and rising incidence of chronic diseases; the effects of cost and quality in the delivery of health care services; access to health care in both developed and emerging markets; and the use of health technologies and data management. The challenges and opportunities emanating from each of these areas can be both global and market-specific.

Aging population and chronic diseases
The shared, long-term trends of an aging population and an increase in people inflicted with chronic diseases are expected to drive demand for health care services in both developed and emerging economies in 2014 and beyond. Aging populations and increasing life expectancies are anticipated to place a huge burden on the health care system in many markets. The treatment cost of chronic diseases is expected to compel a more intense focus on disease education and prevention by governments and health care practitioners while life sciences companies continue to develop innovative new medicines.

Cost and quality
Public and private health care funding systems are economically stressed – across the globe rising health care costs are unaffordable and unsustainable. And higher costs do not necessarily correlate to better results or higher-quality care, even in developed countries.

Access to care
Improving health care access appears to be a major goal of governments around the world, and a centerpiece of many reform efforts. While facilitating increased health care access is an important and worthy endeavor, more people in the system means more demand for services that numerous health care systems are unable to accommodate due to workforce shortages, patient locations, and infrastructure limitations, in addition to cost issues.

Technology
Advances in health technologies and data management are helping facilitate innovation through new diagnostic and treatment options; however, these same advances are likely to increase overall costs, prompting widespread efforts by public and private health care providers and insurers to contain expenditures by restructuring care delivery models and promoting more efficient use of resources.

Also, the technology-enabled, transforming health care system is producing an immense volume of information; how to interpret and use that data will be important. Organizations must also address patient safety, economic, and reputational issues that may arise if they lack appropriate security and privacy controls.

“The concept of glocalization – thinking globally but acting locally – will move to the forefront in 2014 and subsequent years. In the face of change and innovation, stakeholders’ ability to reach into global jurisdictions to learn and mitigate the risk of local change will be invaluable. Industry issues are global, even if care is usually delivered locally. And while the effects of these issues are influenced by local factors, many challenges are shared around the world to varying degrees, as are the opportunities to innovate to solve them,"Rudish said.

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